The new cash cow for law firms in 2023

The cryptocurrency turmoil has rocked major crypto exchanges and driven down the price of crypto assets, but one group stands to benefit: bankruptcy attorneys.

Regulatory compliance and the potential for significant fees through client representation have made cryptocurrency law an attractive area for large law firms. High-profile bankruptcy cases including busts cryptocurrency exchange ftxhedge fund three arrows capitaland cryptocurrency lender blockfiCelsius Network, and Voyager Digital Ltd., are creating new opportunities — and hefty fees — for law firms representing distressed crypto businesses.

“You have to pay the gravedigger… These are complex cases with many new issues, and it should not be surprising that they would require a lot of attorney involvement.”

Adam Levitin, Professor of Law, Georgetown University.

Kirkland Ellis is killing it with crypto law

In 2023, large law firms could earn more than $100 million in legal fees from protracted bankruptcy.

Kirkland & Ellis represents Celsius Network and Voyager Digital, which both filed for bankruptcy earlier this year. is also the principal counsel for the firm blockfi In the bankruptcy action, which was filed in late November. Furthermore, Kirkland & Ellis represents Galaxy Digital Gemini, a regulated cryptocurrency exchange.

According to bloomberg law, Kirkland charges up to $1,995 per hour for the services of its associates on Celsius and Voyager cases, one of the highest billing rates in the region. In each case, the business may have averaged $3.3 million in monthly invoices, reuters Claim.

volatile and complex nature of cryptocurrency industry This means that law firms specializing in crypto law must carefully weigh the potential risks and rewards.

Normal law firm billing rates are private, but in bankruptcy cases, the debtor company’s attorneys must provide a breakdown of their expenses and ask the judge to approve their fees. According to experts cited by Reuters, courts rarely request substantial reductions in professional fees because lawyers are paid from the assets of bankruptcy estates.

Sullivan & Cromwell represent SBF and FTX

Sullivan and Cromwell, a Wall Street law firm, is acting as bankruptcy counsel for FTX. According to Reuters, the firm charged up to $1,825 an hour, although their rates still need to be made public.

Alameda Research, another company founded by Sam Bankman-Fried, is also represented by Sullivan & Cromwell as a creditor in the Celsius and Voyager cases. Latham and Watkins received the highest rates ever for their work with Celsius and Three Arrows Capital. The news agency claims he charged at least $1,825 per hour.

Latham and Watkins Are Flourishing in a World of Crypto Chaos

Latham & Watkins reportedly has a maximum billing rate of $2,075 per hour, making it the highest disclosed rate. Latham & Watkins is currently advising Celsius on regulatory issues and is serving as debtor counsel to Three Arrows Capital.

Other industries, such as retail, have seen a slowdown in Chapter 11 filings due to the COVID-19 pandemic. However, the crypto world has provided a steady stream of revenue for major law firms, legal experts told Reuters.


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